When you consolidate federal student loans with a Direct Consolidation Loan, the resulting interest rate is equal to a weighted average of the interest rates of your existing federal student loans, rounded up to the nearest 1/8%.

The Truth: Not exactly. Student loan forgiveness is only available for federal student loans. To receive student loan forgiveness, you need to enroll in an income-driven repayment plan such as PAYE or REPAYE.

Advice:Student loan forgiveness under an income-driven repayment plan can take 20-25 years, and you must meet certain income requirements.

Myth #3: Always consolidate your student loans.

The Truth:It depends on your specific circumstances. Importantly, you should understand the difference between student loan consolidation and student loan refinance.

Consolidate student loans: If you want to keep your federal student loans to have access to income-driven repayment plans, forbearance, deferral and public service loan forgiveness, then you’ll want to consolidate your federal student loans into a Direct Consolidation Loan. Remember, the federal government will consolidate student loans, but will not refinance student loans. For student loan refinancing, only private lenders refinance student loans.

Advice:The good news is that you can do both student loan consolidation and student loan refinancing. For example, you could refinance private student loans and consolidate federal student loans.

Myth #4: A student loan debt consolidation service can help you consolidate your student loans.

Advice:Don’t pay any fees to consolidate student loans or for student loan refinancing. They both have no fees.

Myth #5: Student loan forgiveness is free.

The Truth: Yes, income-driven repayment plans such as REPAYE can lead to student loan forgiveness for your federal student loans. However, this type of student loan forgiveness is not free. You essentially exchange your student loan debt for a tax bill. That means you may owe income taxes on the amount of student loan forgiveness you receive.

Advice:The idea of “student loan forgiveness” may sound exciting, but make sure to weigh your options to determine if other student loan repayment options may be better for you.

Myth #6: Public Service Loan Forgiveness is automatic if you work in public service.

The Truth: Public Service Loan Forgiveness is not automatic, and among other requirements, you must make the majority of your federal student loan payments while enrolled in a federal income-driven repayment program and consolidate your federal student loans if you don’t have Direct Loans.

Advice: Complete the Employment Certification Form for public service loan forgiveness, and submit annually and when you change jobs.

Myth #7: You should rely on your student loan servicer to give you the best advice.

The Truth: You should rely on yourself to get all the answers you need. Your student loan servicer may offer you advice, but it may not be the best advice for you.

Advice:Do your homework. Compare options. Get informed.

Myth #8: You can skip a student loan payment if you have financial hardship.

The Truth: If you think you may face financial hardship in the near-term, contact your student loan servicer immediately. You can’t just skip a payment. The sooner you evaluate your student loan repayment options, the better.

Advice:Skipping a payment can hurt your credit score. You can try to refinance your student loans to reduce your interest rate and student loan payments. You can also make a lump-sum payment to reduce your principal balance.

Myth #9: Federal student loans have the lowest interest rates.

The Truth: Not necessarily. Federal student loans offer features such as income-based repayment, forbearance and deferral, but they don’t always have the lowest interest rates. With federal student loans, everyone receives the same interest rate – regardless of your credit. Private student loans are based on your individual credit profile and other factors, so interest rates may differ for each borrower. Therefore, if you have strong credit, you may receive a lower interest rate from a private student loan lender.

Advice:Always compare interest rates between federal and private student loans. Graduate students with prior work experience, strong credit scores and income profiles, in particular, may be able to secure lower interest rates with private lenders.

Myth #10: It costs extra money to pay off student loans early.

The Truth: Student loans do not have a prepayment penalty. That means you can pay off your student loans anytime with no fee.

Advice:Here are some helpful tips to pay off your student loans faster.

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